Bubble trouble —

Man offers to sell house for bitcoins

Three years ago, 10,000 BTC bought two pizzas. Now that can comfortably buy a house.

An Alberta man is hoping to become the first person to sell a house for bitcoins. He's asking CAD$405,000, or its equivalent in bitcoins, for the 3.6 acre site.

"We are hoping to be the first piece of real estate sold for bitcoins," Taylor More told us by e-mail. "We think maybe this could help push the currency more mainstream."

His listing describes the property as a "quaint two bedroom bungalow" that "sits on 3.6 acres with beautiful mountain views and 110' of breathtaking Crowsnest River frontage." It includes a 2,800 square foot workshop that More says is "perfect for the handyman hobbiest and also features two additional finished bedrooms."

Enlarge/ If you act fast, 6,750 BTC can get you this fine 3.6 acre property.

"If you had $405k I wouldn't turn you down, but if a partial or whole transaction is done using Bitcoins the price can be reduced depending on how many bitcoins you have to trade."

At the current exchange rate of $60 per bitcoin, buying a $405,000 house would cost about 6,750 BTC.

The value of bitcoins has appreciated dramatically in recent years. In one of the first Bitcoin transactions ever recorded (which took place in May 2010) a man paid 10,000 BTC for two pizzas. If he'd saved those Bitcoins instead, he could have used them to buy More's house with almost $200,000 to spare.

Disclosure: The author of this post owns some bitcoins.

Timothy B. Lee
Timothy covers tech policy for Ars, with a particular focus on patent and copyright law, privacy, free speech, and open government. His writing has appeared in Slate, Reason, Wired, and the New York Times. Emailtimothy.lee@arstechnica.com//Twitter@binarybits

What a moron. He's taking a gamble far, far too late in the game. It will crash again, the question is when, and I believe the likelihood of full (or any) recovery to be low. Anyone who was going to make a quick buck from Bitcoins have already made it, mark my words.

Bitcoin is an alternative currency that has value pretty much because people have decided it has value. There is an agreed-upon record of who has bitcoins, but there is nothing backing it with sovereign power or intrinsic value.

The difference between Bitcoin and most other alternative currencies (such as Linden Dollars, airline miles, or punches in your buy-10-get-1-free haircut card) is that there is no single authority with responsibility for administering it.

EDIT; Disclosure... I own some US dollars, some Linden Dollars (I think I tried Second Life once), miles with two different airlines, a buy-8-get-1-free deli sandwich card, a card for a complimentary meal from a local university's cafeteria, some subway tokens, and gift cards for a couple different stores. I don't own any Bitcoins.

What a moron. He's taking a gamble far, far too late in the game. It will crash again, the question is when, and I believe the likelihood of full (or any) recovery to be low. Anyone who was going to make a quick buck from Bitcoins have already made it, mark my words.

Its an interesting thing. One of my business colleagues is a millionaire, and believes in bitcoin's scarcity inevitably driving prices up that he's urged many of us to buy some. He has even offered to personally guarantee any losses we have up to $50k, by buying our bitcoin from us for our purchase price at any time.

What a moron. He's taking a gamble far, far too late in the game. It will crash again, the question is when, and I believe the likelihood of full (or any) recovery to be low. Anyone who was going to make a quick buck from Bitcoins have already made it, mark my words.

Its an interesting thing. One of my business colleagues is a millionaire, and believes in bitcoin's scarcity inevitably driving prices up that he's urged many of us to buy some. He has even offered to personally guarantee any losses we have up to $50k, by buying our bitcoin from us for our purchase price at any time.

Its polarizing, if nothing else.

It's not dumb when someone will refund your losses, of course. If I were in your position I would buy $50K worth. I know what you mean, wealthy kind endorses it so it may have potential. While that does make it sound promising, I wouldn't bet my house on it.

It crashed due to a major robbery and the ensuing panic. It seems to have stabilized, more or less.

Bitcoin value was relatively stable for all of 2012, but now it's up over 300% since Jan 1st. Looks like a bubble if I've ever seen one.

Really wish I'd bought some after they crashed in 2011 though.

It may be a bubble, but supply of new bit coin was just cut in half in December. Scarcity is built into bitcoin.

Soon BC generation will be like an eBay auction. The closer one get's to the end date, the more frantic desperate things get.

I don't get the point. Sure, we've got asics coming out to step things up the the next level, but they're as affordable as any GPU is for mining, and it doesn't increase the rate of bit coins generated. The algorithm adjusts along with better hardware, such that a new block is always mined about every 10 min.

What a moron. He's taking a gamble far, far too late in the game. It will crash again, the question is when, and I believe the likelihood of full (or any) recovery to be low. Anyone who was going to make a quick buck from Bitcoins have already made it, mark my words.

Its an interesting thing. One of my business colleagues is a millionaire, and believes in bitcoin's scarcity inevitably driving prices up that he's urged many of us to buy some. He has even offered to personally guarantee any losses we have up to $50k, by buying our bitcoin from us for our purchase price at any time.

Its polarizing, if nothing else.

It's not dumb when someone will refund your losses, of course. If I were in your position I would buy $50K worth. I know what you mean, wealthy kind endorses it so it may have potential. While that does make it sound promising, I wouldn't bet my house on it.

Its a long story, but for him its mostly about being right and proving how awesome he is.

One huge problem with there being a finite number of potential bitcoins is the problem of incremental loss. Every bitcoin has to be created and eventually bitcoin creation will cease. At the same time bitcoins are always being lost through computer crashes that wipe out un-backed up wallets, accidental wallet deletion/corruption, people transferring a few uBTC, mBTC, or if they're really stupid BTC, to an instawallet and forgetting to save the link, or through other means.

I'm sure nobody's ever tried to figure it out, I'm not sure if it's even possible, but even if we say it's a slow process, that puts a finite time span on the usefulness of bitcoin. If we assume that the people who run businesses like instawallet and anywhere else that stores bitcoins online for people are honest and will never start seizing bitcoins for inactivity, then that makes it sooner rather than later. Even if they do seize bitcoins that still leaves unrecoverable bitcoins from lost/, locked without a known key, and corrupted wallets that are truly known to be unrecoverable and gone for good.

Disclosure: I own some bitcoins and use instawallet. I use this as an example because they are a well known site that stores bitcoins online not due to my usage of the site or as an advertisement.

Bitcoin is an alternative currency that has value pretty much because people have decided it has value. There is an agreed-upon record of who has bitcoins, but there is nothing backing it with sovereign power or intrinsic value.

The difference between Bitcoin and most other alternative currencies (such as Linden Dollars, airline miles, or punches in your buy-10-get-1-free haircut card) is that there is no single authority with responsibility for administering it.

I'd be interested in trying out bitcoins, mining, I've been looking around for something decent to explain how it all gets set up, but it seems pretty hit and miss, anything good to look at for getting started?

What a moron. He's taking a gamble far, far too late in the game. It will crash again, the question is when, and I believe the likelihood of full (or any) recovery to be low. Anyone who was going to make a quick buck from Bitcoins have already made it, mark my words.

Its an interesting thing. One of my business colleagues is a millionaire, and believes in bitcoin's scarcity inevitably driving prices up that he's urged many of us to buy some. He has even offered to personally guarantee any losses we have up to $50k, by buying our bitcoin from us for our purchase price at any time.

Its polarizing, if nothing else.

It's not dumb when someone will refund your losses, of course. If I were in your position I would buy $50K worth. I know what you mean, wealthy kind endorses it so it may have potential. While that does make it sound promising, I wouldn't bet my house on it.

It crashed due to a major robbery and the ensuing panic. It seems to have stabilized, more or less.

Bitcoin value was relatively stable for all of 2012, but now it's up over 300% since Jan 1st. Looks like a bubble if I've ever seen one.

Really wish I'd bought some after they crashed in 2011 though.

It may be a bubble, but supply of new bit coin was just cut in half in December. Scarcity is built into bitcoin.

Scarcity may well be built in, but that doesn't mean demand won't change. When you talk about supply and demand there are actually two things you need to consider - and the fact that supply is scarce doesn't help the price if demand falls through the floor.

I'd be interested in trying out bitcoins, mining, I've been looking around for something decent to explain how it all gets set up, but it seems pretty hit and miss, anything good to look at for getting started?

edit: if this were easy I think alot more folks would be doing it. I saw a rig a few months ago that a guy had loaded up with video-cards to play around with mining when he was not using it to make rainbowtables (all whitehat). I myself have not even tried to mine, no equipment, its actually a pretty ingenious process. If it did not involve the human element it would have a better chance, but I like to see bitcoins as maybe the first iteration of something that could be alot more prevalent for better or worse.

One huge problem with there being a finite number of potential bitcoins is the problem of incremental loss.

When losses from 2.1 quadrillion potential Satoshi become so large that it becomes difficult to use them because there are not enough, then just start up a new block chain with a new limit, and have exchanges convert from one to the other as needed.

Just like there is more than one currency in the world, there can be more than one block chain. In fact, it will probably be necessary to start up alternate chains when the number of transactions gets to be unreasonably large for one chain to handle. Market forces will make it happen.

One huge problem with there being a finite number of potential bitcoins is the problem of incremental loss.

When losses from 2.1 quadrillion potential Satoshi become so large that it becomes difficult to use them because there are not enough, then just start up a new block chain with a new limit, and have exchanges convert from one to the other as needed.

Just like there is more than one currency in the world, there can be more than one block chain. In fact, it will probably be necessary to start up alternate chains when the number of transactions gets to be unreasonably large for one chain to handle. Market forces will make it happen.

I didn't realize that, although I should have. Doesn't the question then become how do clients and exchanges deal with multiple block chains? Since exchanges and individuals can't create their own bitcoins outside of the normal mining process it would require block chain A and block chain B to have an exchange rate with bitcoins from A slowly becoming worth more and more as they become more scare until enough people abandon block chain A and it collapses. The process would then repeat with any further block chains down the line.

Can't say I'm all that interested in bitcoins... but then, I'm not a drug dealer.

Indeed, buying a house using an untraceable currency seems like the perfect money laundering scheme. Which is, incidentally, the reason many countries require large transactions to use credit cards, bank transfers or some similarly verifiable and traceable means.

Can't say I'm all that interested in bitcoins... but then, I'm not a drug dealer.

Indeed, buying a house using an untraceable currency seems like the perfect money laundering scheme. Which is, incidentally, the reason many countries require large transactions to use credit cards, bank transfers or some similarly verifiable and traceable means.

Interesting thing, if your country doesn't officially recognize BTC as a currency, then in the country's eyes you are essentially signing over the deed as a gift. Taxation will occur based on the appraisal value of the house as it will be seen as income for the recipient.

The standard deed transfer paperwork will still need to be filled out, and that would be the only part that really matters for government purposes if someone scrapes up the 7K BTC to do this completely electronically.

Frankly giving something of concrete value to someone in exchange for something of no perceived value is an age-old practice in North America. You give us blankets, food and shelter, we'll give you shiny glass beads.

One huge problem with there being a finite number of potential bitcoins is the problem of incremental loss.

...

that puts a finite time span on the usefulness of bitcoin

You misunderstand. A bitcoin is divisible down to (currently) eight decimal places, or 0.0000001 Bitcoins, so as Bitcoins are 'hoarded'[*] and lost (just as when paper money is burned or kept for so long that it's not legal tender any more) people can simply adapt to using smaller subdivisions. There's also scope for increasing that eight decimal places arbitrarily. That's why Litecoin's larger distribution of 82,000,000 is a red herring; all that matters is the eventual limit and the ability to subdivide what exists.

Loss gives any currency a gentle deflationary tendency. Bitcoin is arguably more susceptible because it's much easier to lose a wallet, but as people tend to invest in precautions proportionate to the amount they're holding, similarly to paper money, the amounts lost are likely to be small.

[*] Most people seem to feel that 'saving' in any other currency is 'hoarding' when it comes to Bitcoin; I'm not sure why.

Can't say I'm all that interested in bitcoins... but then, I'm not a drug dealer.

Indeed, buying a house using an untraceable currency seems like the perfect money laundering scheme.

No more or less traceable than dollar bills, which is why both cash and Bitcoin see large black-market use. A lot of people seem to conflate Bitcoin's potential to be used anonymously (an apolitcal and amoral property of a technology) with the real-world "bad" uses a minority of people are putting it to, much like Tor.

Yes, but central banks keep track of that (among other things) and print more money to avoid a deflationary spiral.

iwilcox wrote:

[*] Most people seem to feel that 'saving' in any other currency is 'hoarding' when it comes to Bitcoin; I'm not sure why.

Maybe because (sane) people don't just put dollar bills under the mattress but bring it to a bank, buy stocks, or generally invest it somewhere where it earns interest. If people say that they buy the dollar, the euro, the ..., they mean that they buy treasuries (which again earns interest).

People that "invest" in bitcoins do that because they believe that the currency itself is gaining value against other currencies. It's speculation, not saving.

EDIT; Disclosure... I own some US dollars, some Linden Dollars (I think I tried Second Life once), miles with two different airlines, a buy-8-get-1-free deli sandwich card, a card for a complimentary meal from a local university's cafeteria, some subway tokens, and gift cards for a couple different stores. I don't own any Bitcoins.